By Pranav Kashyap
(Reuters) – European shares inched higher on Tuesday after hitting six-month lows in the previous session, resonating with a recovery across global markets and buoyed in part by corporate earnings updates.
The STOXX 600 was up 0.4% by 0838 GMT, after logging its steepest three-day decline since June 2022 and closing below the key 500-points mark for a second day on Monday.
The “fear gauge” Euro STOXX volatility index cooled down to 27.8 points after hitting its highest level since March 2022 at 40.8 in the previous session.
Japan’s Nikkei closed up 10% after its worst single-day decline since 1987 in the previous session, while most other Asian equity indexes also rose. [.T] [MKTS/GLOB]
Wall Street also looked steadier, with S&P 500 futures up 1%, while Nasdaq futures rose 1.4% [.N]
Investor nerves appeared to be soothed after Federal Reserve policymakers pushed back against fears of a recession. Fed San Francisco President Mary Daly said she was “more confident” U.S. inflation is headed toward the Fed’s 2% goal.
However, traders were wary of making big bets as they were still “reassessing the impact of the pullback” and were waiting for a fresh catalyst to see the bullish appetite take hold.
“There is a lack of drive and appetite in today’s session to try and take this further and move higher even though we have seen some favourable conditions for bias to come in,” said Daniela Hathorn, senior market analyst at Capital.com.
With a light data week in Europe, investors will focus on more commentary from Europe Central bank and Fed officials later in the week to gauge the mood of both central banks.
“It’s going to be a little bit of let’s see what creeps in because there isn’t anything set in stone this week,” Hathorn said.
Technology shares rose 1.2%, while banks gained 1%, led by an 8.4% gain in Italian bank Monte dei Paschi di Siena after it raised its profit outlook.
Adecco gained nearly 5% even as the Swiss staffing company flagged bleak hiring trends to persist in the third quarter.
Shares of Zalando gained 4% after the online fashion marketplace reported an 18.5% rise in its operating profit for the second quarter.
Abrdn gained 3.7% despite the British asset manager reporting a modest dip in its assets under management in the six months ended June 30.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Sherry Jacob-Phillips and Varun H K)
